Citi, UBS like subprime debacle not to repeat in India: Kamath

PTI|

May 01, 2008, 12.00 PM IST

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NEW DELHI: Pooh-poohing the doomsayers, K V Kamath, the new CII President today exuded confidence that UBS and Citi kind of crisis will not be repeated in India, saying the total derivative exposure of all the banks here may be just quarter a per cent of USD 500 billion balance sheet.

"If our (ICICI Bank's) balance sheet is $100 billion, SBI balance sheet is $150 billion ... We are looking at Indian banks having a total size of USD 500 billion. It is not even half a per cent of that, it might be quarter per cent," Kamath told PTI when asked about Indian banks' exposure.

Asked if Citigroup and UBS, the global banking giants who lost billions due to subprime crisis, could happen in India, Kamath, who heads the country's biggest private sector lender ICICI Bank, said, "Nothing can happen like that. I think there is no similarity between what has happened to global banks and Indian banks...it is just an alarmist mentality that has got into us," Kamath said on fears of losses that banking sector could suffer due to the financial crisis in the Western world.

Kamath asserted there is no subprime exposure that the Indian banks have taken directly to any subprime lending, while adding that "what has happened in the world is beyond subprime... that is interest spreads have widened."

"In the context of Indian banking sector, our exposure is limited," Kamath said, when asked about the trend of one bank after another making provisions for the derivative-related potential losses.

Kamath said total exposure was just a fraction of balance sheets of Indian banks put together. "People are not putting that in context. It (the impact) is immaterial in the context of the size of Indian banking system," Kamath said on the concerns being raised over the issue.

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